Tax treatment of Bitcoin and cryptocurrencies


The Bitcoin (which we will take as a reference as the most widespread among cryptocurrencies), the virtual currency used for online transactions, designed in 2008 and introduced in 2009, does not require intermediaries and does not use a central body.

That’s why he defines himself currency equals.

Like any other currency, Bitcoins always allow thepurchase of goods and services and there are several sites where you can change yours Bitcoin with dollars, euros, yen or other currencies.

Bitcoins can possibly be set aside in a electronic wallet in your PC, or be entrusted to a electronic banking.

As mentioned, it is a decentralized system, which does not provide for the intervention of banks or other intermediaries and with fully open source software. And unlike the credit card purchases, transactions are carried out anonymously.

The real problem, moreover, is precisely that this kind of parts could become a sort of virtual tax haven. And the various tax administrations, aware of this, are starting to pose the problem.

Bitcoin and cryptocurrencies: what they are and what system they are based on

Corn how the “system” bitcoins?

Units of Bitcoin (and other cryptocurrencies) are purely intangible in nature, reflected in simple accounting records who are part of Block chain, a distributed ledger of all transactions. Individual Bitcoins are put into circulation through something called “Mining”, It’s theextraction.

Verification of uniqueness and security of transactions takes place via the solution of complex mathematical operations, to solve which considerable computing power is required (now almost completely closed to the home user, due to the considerable amount of power and availability of hardware that these operations require).

This verification is essential to the functioning of the system, and is therefore rewarded by thefree bitcoin allocation.

All transactions, confirmed by mining, are included in the blockchain in a unique and mathematically certified way.

THE Bitcoin Wallets allow you to make one transaction only to those who own it “Private key”, a alphanumeric string protected by a common password which is used to sign transactions, mathematically certifying the identity of the owner of this wallet.

However, there are several IT platforms where it is possible to convert cryptocurrencies into other assets, starting with fiat currencies; but, gradually, cryptocurrencies are gaining momentum to the point that they have started to be accepted as payment method by many vendors of goods and service providers worldwide.

Indeed, the gods are already born Bitcoin ATM where it is possible to buy them and then spend them with those who are willing to accept them.

Bitcoin and cryptocurrencies: the legal framework

Considering the operation, what is the correct legal framework will give Bitcoin And the others crypto-currencies?

A first path is the one that brings Bitcoin back to legal category of money.

However, in a world of fiat currencies, money in the technical sense is just that.set of paper banknotes and coins which is issued, or authorized by central banks, and which receives legal value from them.

A second hypothesis to consider is to bring Bitcoins back into the category of “Financial products”: they can in fact be extracted or bought also for the purpose of investing one’s savings.

Also “Financial products” in a technical sense, however, they are just the ones that fall into a official definition, provided in this case by Consolidated finance law, according to which they are such “Financial instruments and any other form of investment of a financial nature”.

At this point there is no one last way and this is to consider it as goods. After all, like gold and silver, it is valuable as long as people and companies in the market are free to choose to value it. Therefore, the most correct classification of Bitcoin (and other cryptocurrencies in general) is that it is an asset, in the literal sense defined by the Civil Code: ““Things that can be subject to rights are goods”“(Article 810 of the Italian Civil Code).

Of course it will be a intangible personal property.

Considering the functioning and the legal nature, we need to approach the profile more “Thorny” That of tax treatmentwhereas, moreover, the settlement of such a delicate matter would require at least intervention in the Community.

Tax treatment of Bitcoin and cryptocurrencies

To arrive at a correct classification of the case for VAT purposes the Court of Justice, on 22 October 2015, however established that theArticle 2 (1) (c) of Council Directive 2006/112 / EC of 28 November 2006, must be interpreted in the sense that they constitute provision of services for a fee operations which consist of traditional currency exchange compared to the unit of virtual currency “Bitcoins” and conversely, against payment of a sum corresponding to the margin made up of the difference between, on the one hand, the price at which the operator concerned buys the currencies and, on the other hand, the price at which he sells them to his clients.

THE’Article 135 (1) (e) of Directive 2006/112 it should be interpreted as a provision of services, which consists of the exchange of traditional currency for units of virtual currency “Bitcoins” and conversely, against payment of a sum corresponding to the margin made up of the difference between, on the one hand, the price at which the operator concerned buys the currencies and, on the other hand, the price at which he sells them to his customers , they compose operations exempt from value added tax in accordance with this provision.

The judgment of the Court therefore put a fixed point on the story, at least for indirect tax purposes (and in reference, however, only to one of the different uses of bitcoin).

Exchanging a euro for a Bitcoin is therefore equivalent to aprestitution of services and being a bitcoin comparable to a payment instrument, as established by the Court of Justice, the transaction is exempt from VAT.

However, the solution provided by the sentence only concerns the case where the bitcoin has turned into another and a royalty is requested for this operation, that is to say essentially respecting only theactivity of exchangers, that is to say of those subjects which change bitcoins (and not being, for example, applicable to end users, nor to minors, that is to say to those who “mine” Bitcoins).

At the national level, too, something has changed.

On September 2, 2016, theRevenue Agency indeed issued a Resolution (n.72 / e of September 2, 2016), assimilating, among other things, virtual currencies to foreign currencies.

With regard to the case of withdrawing currency from accounts or deposits, Art. 67 co. 1-ter of TUIR establishes that the capital gains on disposal against remuneration in foreign currencies from deposits and current accounts combine to form income provided that, in the fiscal period in which they are made by withdrawal from the deposit or account, the total balance of deposits and current accounts held by the taxpayer with of all intermediaries, calculated according to the exchange rate in force at the start of the reference period, is greater than 51,645.69 euros for at least 7 consecutive working days.

In the presence of this obligation, all transactions carried out in the calendar year must therefore be declared, even prior to the date on which the threshold is crossed.

Considering therefore that the electronic money should constitute a “substitute” of cash, the purchase of virtual currency for foreign currencies from current accounts should be equivalent to withdrawal of foreign currency of the account, which, as mentioned, could generate taxable income on the basis of the aforementioned regulatory provision.

In short, a still very confused picture, in which the Resolution intervened, which in any case only intervened in the answer to the interrogation, with all the limits of the case, did not provide the required clarity, even considering that clarity in such a sector cannot ignore a fundamental question, which is the responsibility of other bodies (Bank of Italy principally), like that of exact legal definition of bitcoin.

Also on the tax front, the instructions for completing part RW last year also included a specific indication about virtual currencies.

In the code table of the assets held abroad it is in fact specified that it is necessary to indicate – with the code 14 – also this type of currency, with the precision that the code of the foreign country may not be indicated.

Basically, for the first time, the RW panel instructions state that within a single panel the virtual currencies, where, on the basis of the provisions of Article 4 of Legislative Decree 167/1990, natural persons (in addition to non-commercial entities and simple companies) must complete the RW part of the declarative model, relating to the tax audit, in the event of detention “investments abroad or foreign financial activities likely to generate taxable income in Italy ‘.

Tax treatment of Bitcoin and cryptocurrencies: a look to the future

In conclusion, beyond the possible technical-legal solutions, what seems undeniable is that the electronic money diffusion it has to be governed in one way or another, also because it exposes its users to considerable risk.

And this not only from a tax point of view, but also from the anti-money laundering discipline.

While waiting for the international community and the European institutions to adopt the regulatory measures appropriate to the phenomenon of “Virtual currencies”, it appears necessary for the national legislator to adopt specific measures.

Indeed, within ten years, technologies based on blockchain principles record financial transactions related to the 10% of world GDP.

And so we must avoid having to deal with a river of “money” without control.

What is certain is that we are witnessing it today conflict between financial systems, where one cannot escape the fact that, often, the declines of crypto-currencies follow proclamations of unreliability, launched precisely by the traditional financial community.

Fluctuations also occur as a result of a series of new “Negative” (as well as regulatory announcements from states, China and South Korea in the first place), which are pushing investors to get rid of virtual currency.

The crypto-currencies They are therefore a changing world, at a rate unthinkable just a few years ago and perhaps so fast that they are even anticipating all forecasts.


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